The Finance Ministry has granted approval for the Revenue Department to cut its collection target by 160 billion baht due to weakening global oil prices, shrinking revenue for large companies and a reduction in import duties.
Revenue Department director-general Prasong Poontaneat said falling global oil prices had discouraged oil-producing companies from drilling, keeping it in stock to reduce costs.
"Some companies that previously reported profits of 4 billion baht reported losses last year," Mr Prasong said.
"Overall revenue tax collection from the petroleum sector is expected to fall by 10-20 billion baht this fiscal year."
Tax collection from large companies, particularly Japanese firms, is also likely to be affected by the economic doldrums.
"Corporate income tax filings for these Japanese companies show they've been hurt by the economic impasse," Mr Prasong said.
The recent elimination of import duties for more than 2,000 items used as materials for further production is another factor shrinking tax revenue.
"These lost duties are likely to cause tax revenue collection to drop by 30 billion baht," Mr Prasong said.
The department's earlier revenue target was 1.97 trillion baht for fiscal 2015, up by 4% or 74.4 billion baht from fiscal 2014's target.
However, the tax revenue collected for fiscal 2014 fell short by 160 billion baht or 8.5% from its target of 1.73 trillion baht.
Hence, in order to set a more realistic tax revenue target, the Finance Ministry approved the department cutting the target for fiscal 2015 to 1.81 trillion baht, down by 160 billion.
The new target is 75.1 billion baht higher than the actual tax collected in fiscal 2014.
"The target for fiscal 2015 is still considered high, given the ongoing economic conditions," Mr Prasong said.
But he is confident the economy has started improving gradually due to higher revenue collected from stamp duties and specific business tax.
"This reflects improving investment and employment in the country, particularly investment along borders where land prices have continued to jump, increasing 10 times in some areas," Mr Prasong said.
For the first four months of fiscal 2015, the government's overall revenue collection stood at 665 billion baht or 0.2% above the target. However, revenue collected from three departments — Excise, Revenue and Customs — was still short of its target by 15.9 billion baht or 2.4%.
Revenue collected from state enterprises and other sources offset the shortfall.